Staples - Johnstown 590 Galleria Dr, Johnstown PA 15904 Phone Number: (814) 262-9096
The distribution of manufacturing overhead costs to individual product unit, or production batches generally, requires a base or a cost driver, to which reference a rate, known as material burden rate applies. Material burden is the amount of manufacturing overhead costs that a unit of the base carries.
Step 1. Set up a standard costing system for direct materials. A business can initially assume or budget direct materials cost by implementing a standard costing system to estimate the expected purchase price and production usage of direct materials using the best information available.uppose that the business has set the standard direct materials cost at $20 per unit but actually purchases the materials later at $25 per unit for100 units for a total of $2,500.